Very interesting indeed. It's nice to see some intelligent retrospection on the film, as although I do think the script was rather poor and roughly written, the added exposition to Cloud's character is both well thought and very appropriate. While many disagree with Cloud's regression back to depression and guilt, I actually believe it to be a more realistic and plausible device than the convenient resolution assumed at the end of the game. I don't think that kind of resolution is possible with a character such as Cloud.
He is, nor ever was, a very stable or confident individual, and I don't believe defeating Sephiroth was always at the crux of his 'journey'. I personally think the resolution at the end of AC, that he has conformed to the idea that he will never truly overcome his regrets and his guilt, to be perfectly in tune with his character. In this sense, the second battle against Sephiroth becomes a victory over feeling ashamed of that fact, and instead simply accepting it.
Good read.